Published September 20, 2011
Executives with the bankrupt solar energy firm at the heart of a widening federal controversy plan to plead the Fifth when they head to Capitol Hill for a hearing Friday.
A statement Tuesday from California-based Solyndra said CEO Brian Harrison and Chief Financial Officer Bill Stover have informed members of the House Energy and Commerce Committee that they will not be able to provide "substantive answers" to lawmakers' questions due to the ongoing Justice Department probe.
"Present circumstances require both gentlemen to exercise their Fifth Amendment rights in the face of questioning that might occur," the company said.
Republican committee leaders blasted Solyndra executives for "breaking an agreement to voluntarily testify."
"Who exactly are Solyndra's executive trying to protect and what are they trying to hide?" said Reps. Fred Upton, chairman of the Energy and Commerce Committee, and Cliff Stearns, chairman of the Investigations Subcommittee.
The company's statement said both executives were following the advice of counsel, but it also continued to defend the firm's actions. The company came under scrutiny after filing for bankruptcy despite receiving nearly $530 million in federal taxpayer-backed loans.
"The company is not aware of any wrongdoing by Solyndra officers, directors or employees in conjunction with the DOE (Department of Energy) loan guarantee or otherwise," the statement said, claiming the investigation will "clarify the facts surrounding the events leading to the DOE loan guarantee to Solyndra and looks forward to a time when its executives can more freely discuss their views on these events."
Stover attorney Jan Nielsen Little also wrote in a letter to committee members that, "on my advice," Stover would show up at the hearing but not offer testimony. "Nothing of substance should be read into Mr. Stover's decision to heed his counsel's advice," Little wrote.
The GOP committee leaders weren't convinced.
"It's disappointing that the officials who canvassed the halls of Congress in mid-July and misled our members about the financial state of their company are now unwilling to answer direct questions, but any effort to cover up the truth will ultimately not succeed," they said.
A committee aide told Fox Business that staff last received email assurances from Solyndra counsel on Sept. 10 that executives would not take the Fifth Amendment and would testify voluntarily.
The aide said the committee was first informed this afternoon of the apparent change of heart, 10 days later.
Meanwhile, pressure is only growing on Solyndra and the administration officials involved in the loan to provide more information.
The chairman of the House Oversight and Government Reform Committee said Tuesday that his panel will probe government loan programs that benefit private companies in light of the scandal.
Rep. Darrell Issa's commitment to an investigation comes on top of the call by Rep. Lamar Smith, R-Texas, chairman of the House Judiciary Committee, for a special prosecutor in the Solyndra case. Smith wants to know whether politics played a role in the decision to grant the loan and why the administration agreed to restructure it earlier this year.
Issa said his committee will take a "broad" approach.
"We're looking at the system," Issa said Tuesday in an interview on C-SPAN. He suggested the system of government-backed projects could be "unfixable."
He suggested the panel might also look at whether White House officials coordinated with the company LightSquared to establish a new wireless broadband network. That program has come under scrutiny following the allegation that a general was pressured to changed his testimony on the project.
"There's been this attitude that somehow government can weigh in with loan guarantees and money and pick ... winners and losers," Issa said. He called that approach "dangerous."
Several other entities already are investigating Solyndra. The FBI raided the company's California headquarters earlier this month. The House Energy and Commerce Committee, as well as the inspectors general for the Treasury and Energy departments, are conducting their own probes. Energy and Commerce Committee Republicans on Tuesday wrote to Energy Secretary Steven Chu expressing concern about another round of loan guarantees worth nearly $9 billion that's supposed to be finalized by the end of the month.
In a letter to Attorney General Eric Holder, Smith asked that the Justice Department take the additional step of appointing an independent prosecutor to look into the administration's dealings with the company.
He wrote that events preceding the bankruptcy "have raised suspicion about the extent to which the Obama Administration may have singled out Solyndra for special treatment" because of Obama's ties to one of the company's top investors.
Specifically, Smith wants the prosecutor to determine if the deal was rushed through, if the Energy Department placed appropriate protections on taxpayer dollars in the deal and if the administration did not pay attention to "clear signs that Solyndra's ability to repay its loan was in serious jeopardy."
Administration officials have denied politics and relationships played any role. The White House has said the deal was not rushed through, and that it was approved by the Energy Department and White House budget office on its merits.
Administration officials have said the government must continue to invest in clean-energy projects.
Other details emerging from the Solyndra case are starting to raise questions. Sen. Orrin Hatch, R-Utah, took to the Senate floor Tuesday to decry reports that laid-off Solyndra workers have applied for what's known as trade adjustment assistance. The taxpayer-backed benefits are supposed to help workers who lost their jobs presumably because production was shifted overseas.
"For each initial wasted taxpayer dollar, the government multiplies the losses and manages to waste another quarter," Hatch said.
And The Washington Times reported that the bankruptcy case will involve some pricey bill-able attorney hours which could further sap the amount of money available to pay back creditors. According to the article, Solyndra is looking to pay former Massachusetts Gov. William Weld $825 an hour for help on the case, as well as other lawyers and consultants.
In the LightSquared case, the billionaire backer of the company has rejected claims that he used White House connections to interfere with a Pentagon commander's testimony on Capitol Hill last week. He told Fox News it was "absolutely false" to claim he obtained written testimony in advance.
Air Force Gen. William Shelton had told a House subcommittee that the network could interfere with critical GPS systems used by the military. But Rep. Mike Turner, R-Ohio, later told Fox News that Shelton confided that he thought the testimony had been leaked, and that he rebuffed requests to soften it.
The Daily Beast has since reported that another U.S. official confirms the White House tried to influence testimony to benefit LightSquared. Anthony Russo with the National Coordination Office, described the encounter as "guidance" rather than pressure.
Fox Business' Rich Edson contributed to this report.